Trump carelessly tweeted last week that “trade wars could be good for the U.S. and easy to win!”
Business leaders, agricultural leaders and our trading partners all agree that Trump is absolutely wrong. They are warning of catastrophic consequences of an all-out world trade war. Our trading partners have made it crystal clear, they will retaliate if Trump imposes any more tariffs.
Why do all these leaders understand the seriousness of Trump’s trade war threat to Iowa, yet Iowa Republicans are afraid to speak out? Both Governor Reynolds and Senator Ernst have timidly warned of negative consequences but take no action. If it was President Obama proposing a trade war that would devastate Iowa’s economy, every Iowa Republican leader would be screaming in protest.
Apparently Gary Cohn, Trump’s Chief Economic Advisor, resigned this week because he understood how dangerous a trade war would be for America. Trump’s Treasury Secretary Steve Mnuchin, national security adviser H.R. McMaster and Defense Secretary James Mattis all oppose protectionist trade tariffs.
How much damage will Iowa Republicans allow Trump to inflict on the economy before finding their voices?
The impact of a trade war on Iowa is obvious by a quick look at the numbers. Iowa is the second largest exporter of agricultural products in the United States. Over 3,500 Iowa companies depend on exports. Iowa’s exports represented $12 billion in total international trade, both imports and exports, and employ nearly 500,000 Iowans. That’s more than one in five Iowa employees whose jobs are dependent on trade.
Maintaining and growing exports is essential to both Iowa’s manufacturing and agricultural future. Iowa is especially susceptible to trade retaliation due to our dependency on both agricultural and manufacturing exports. Imagine our export buyers adding a 25 percent tariff on our corn, soybeans, pork or beef?
This week as Pence spoke in Omaha, the Nebraska Farm Bureau issued a statement on Trump’s trade war. “President Trump’s plans to place U.S. tariffs on imported steel and aluminum presents a real and viable threat to the future of U.S. agricultural trade and the prosperity of American agriculture. History has shown us that these types of actions lead to retaliation from our trade partners that ultimately destabilize markets for agricultural commodities; markets that Nebraska’s farmers and ranchers depend upon for their livelihoods. We urge the president to rethink this dangerous course of action that could have long-lasting negative impacts to an already struggling U.S. agricultural economy and the farm and ranch families that will feel the real consequences of lost markets.”
Perhaps Iowa soybean farmers have the most at risk since the Trump’s 25 percent steel tariffs are directed at China. In 2016 China purchased 60 percent of total U. S. soybean production. Iowa is the second largest producer of soybeans. Imagine China retaliating and slashing soybean imports by 25 percent or imposing huge tariffs. The Iowa soybean farmers would be crushed with that kind of devastating loss.
Trump’s trade threats are a real danger to Iowa soybean producers. According to Paul Burke, North Asia regional director for the US Soybean Export Council explained that China has been anticipating Trump’s threats.
He says, “China has been researching the potential impact of trade measures on soybeans imported from the US for more than a year.”
We were told when Trump appointed former Governor Branstad as Ambassador to China, it would give Iowa agriculture a unique voice on trade.
Where is Branstad? Why aren’t all of the members of the Iowa Republican delegation calling Branstad back to the U.S. and grilling him on Trump’s China bashing?
There is an emergency endangering the future of Iowa exports. Republicans must find their voices sooner than later.
by Rick Smith